CRISIL (CRISIL) Q4 01/02 earnings summary

Executive summary

• FY02 total income rose 34.46% to ₹692.95m; operating income increased 51.83% to ₹667.74m, led by Ratings.

• Profit before tax more than doubled to ₹286.23m; net profit rose to ₹130.78m from ₹96.64m, with EPS of ₹21.09 versus ₹15.59.

• Results included a ₹68.28m increase in rating income from a change in initial-rating-fee recognition and a ₹52.45m write-off of earlier-year taxes paid under protest.

Financial highlights

• Operating income: ₹667.74m, up 51.83%; other income was ₹16.08m versus ₹16.86m.

• Profit before depreciation and tax was ₹356.35m versus ₹187.66m; profit before tax was ₹286.23m versus ₹133.84m.

• Net profit was ₹130.78m versus ₹96.64m; tax expense included ₹52.45m of earlier-year tax arrears written off.

• Proposed dividend increased to 65% (₹6.50 per share) from 55%; proposed dividend totaled ₹40.30m.

Outlook and guidance

• Ratings growth drivers for FY03 include refinancing, traded debt instruments, higher bank capital requirements, reduced sovereign support to state entities, and structured finance.

• Corporate ratings expected international revenues to double in FY03; disinvestment and further refinancing by stronger corporates were expected to support revenue.

• Advisory banking and finance expected growth from banks’ shift to risk-based pricing and lending; rapid expansion at Crisil.com was expected to reduce losses and could reach breakeven.

• Capital expenditure was expected to be funded from internal accruals and liquid assets, with borrowing an option if considered necessary.